Recently, the company issued an announcement of the 2023 annual results report. In 2023, the company achieved operating income of 357 million yuan, down 19.90% from the previous year; operating profit of 90.58 million yuan, down 46.46% from the previous year; total profit of 92.62 million yuan, down 45.67% from the previous year; net profit to mother of 84.17 million yuan, down 45.80% from the previous year; net profit without deduction of 77.39 million yuan, down 39.31% from the previous year.
Demand in the downstream market is sluggish, and performance is under pressure. The company's main downstream industry is the industrial robot industry. During this period, demand for the company's products was further affected due to sluggish market demand in the downstream 3C electronic products, semiconductor industry, etc., and demand in industrial robotics and other industries was under pressure, which further affected the demand for the company's products, and the company's sales situation was affected to a certain extent. In the medium to long term, cyclical fluctuations in the industrial robot industry do not change the long-term development trend of industrial automation.
The import substitution process is expected to accelerate. According to the company's announcement, at present, mainstream international brands still dominate the global precision reducer industry. The delivery cycle of foreign products is longer and the price is higher, thus limiting the development of domestic robots to a certain extent. However, with the promulgation and implementation of a series of national industrial incentive policies, China has taken breaking through the key core technologies of robots as an important strategy for scientific and technological development, and support for the development of precision speed reducers is constantly increasing. The products developed by some domestic companies have been able to reach international standards in terms of performance and stability, breaking foreign technology monopolies and gradually replacing imports from international brands. In the future, with continuous investment in R&D, technical maturity, and improvement in product performance and quality, domestic manufacturers can accelerate the degree of localization with advantages such as higher product cost performance, better on-site service capabilities, shorter delivery cycles, and faster after-sales response.
Focusing on the transmission industry chain, mechatronics is an important development direction. With the continuous upgrading of China's manufacturing industry, emerging high-end equipment OEMs such as high-end CNC machine tools and humanoid robots place higher demands on improving accuracy, reducing volume, increasing transmission torque, and reducing costs in the production process. As a result, precision transmission parts products upstream in the industrial chain are gradually developing in the direction of mechatronics. According to the company's financial report, as a modular precision transmission device integrating components such as speed reducers, servo motors, and drivers, mechatronic products can improve the key performance indicators of downstream machines, reduce the types of components purchased by manufacturers, reduce installation processes, and improve integration efficiency. For the robot industry, it can lower the threshold for robot development and application, allow downstream manufacturers to focus more on the development of their robot application scenarios, promote the improvement of usage efficiency and reduction of production costs in the downstream industry, and meet the market needs of downstream industry customers. For the high-end machine tool industry, a mechatronic high-precision CNC turntable with a reducer as the core component can meet the precision processing requirements of high-end CNC machine tools in terms of accuracy, rigidity, and service life. According to the company's development strategy, it will continue to focus on the transmission industry chain. Through innovations in technologies such as mechatronics and micro electrohydraulic servos, market development efforts will be increased, and new mechatronic products and miniature electrohydraulic servo products will gradually enter the market. The company continues to increase investment in R&D, expanding in the direction of mechatronics and micro electrohydraulic technology, focusing on the demand for cutting-edge high-end equipment and driving the company's long-term development. At the same time, the company continues to strengthen brand building and promotion, increase publicity and promotion efforts at home and abroad, actively participate in domestic and foreign industry-related exhibitions, and increase the popularity of products at home and abroad. At the same time, the company has strengthened its overseas layout since this year, set up an overseas headquarters in Singapore, set up an R&D and testing center in Germany, and plans to launch production capacity in Mexico to begin the company's global development.
Investment suggestion: As a leader in domestic speed reducers, the company is expected to benefit from the long-term development trend of industrial automation. With the gradual recovery in downstream market demand and the development of emerging industries such as humanoid robots, the company is expected to continue to increase its performance with various products such as mechatronics and the international layout. It is estimated that in 2024 and 2025, the company's net profit due to mother will be 170 million yuan and 238 million yuan respectively; the corresponding PE will be 133 times and 95 times; the first coverage will be rated as “increase in wealth”.
Risk warning: the risk that the industrial robot industry falls short of expectations, the risk that the humanoid robot market falls short of expectations, the risk that the localization process falls short of expectations, the risk of increasing market competition, the risk of declining industry demand, and the risk of changes in the technology path.